CAGW Names Sec. Chu Porker of the Month


For Immediate Release:

November 28, 2011
Contact:Leslie K. Paige (202) 467-5334

Luke Gelbe (202) 467-5318

 


(Washington, D.C.) – Citizens Against Government Waste (CAGW) today named Department of Energy (DOE) Secretary Steven Chu its November Porker of the Month.  Chu’s weak oversight of DOE’s loan guarantee program (LGP) resulted in huge losses to taxpayers when solar panel manufacturer Solyndra, the recipient of a $535 million loan guarantee, filed for bankruptcy in September.  Now, the Department of Labor (DOL) has announced that Solyndra’s former employees qualify for federal aid packages worth $13,000 each under DOL’s Trade Adjustment Assistance (TAA) program, which compensates and retrains American workers who can prove that their jobs were lost as a result of foreign competition.  The TAA benefits far exceed normal unemployment benefits.  The DOL granted Solyndra’s employees TAA by accepting the company’s claim that it went belly up as a result of unfair competition by Chinese solar panel manufacturers, rather than from mismanagement by company executives.


Solyndra was granted the $535 million loan through a green energy technology section of the LGP, which received a massive increase in funding on the 2009 stimulus package.  The LGP program itself has been the subject of three Government Accountability Office (GAO) reports since its inception, all detailing its management weaknesses, arbitrary selection process, and vulnerabilities to manipulation and politicization. 


Unfortunately, Solyndra was not Sec. Chu and DOE’s only ill-fated LGP recipient.  Beacon Power and Evergreen, Inc., both of Massachusetts, along with SpectraWatt of Oregon, filed for bankruptcy after receiving DOE loan guarantees.  A July, 2010 GAO report concluded that the LGP lacked clear goals and failed to hold all applicants to the same standards.  GAO said that the LGP “has treated applicants inconsistently, favoring some and disadvantaging others,” and that “some applicants … receive conditional commitments before incurring expenses that other applicants had to pay.  It is unclear how DOE could have sufficient information to negotiate conditional commitments without such reviews.” 


“Sec. Chu and his colleagues dismissed numerous warning signs that the LGP was a ticking time bomb,” said CAGW President Tom Schatz.  “The dramatic program expansion in 2009 and the continued funneling of taxpayer dollars toward poor investments reeks of poor management and crony capitalism, since Solyndra’s major investors were among the President’s largest campaign donors.  Energy officials interfered in the business and financial operations of the company; they pushed to have news of the Solyndra’s layoffs and escalating financial woes delayed until the day after the elections of 2010, which only amplifies the stench.  Solyndra’s bankruptcy is another example of the waste that results when government officials try to dabble in the markets with the public’s money, and it casts a very unflattering light on all federal loan guarantees, along with all 2009 stimulus spending package itself.  If this is the Obama administration’s idea of how America can ‘invest’ in its economic recovery, taxpayers would much rather keep the money and do it themselves.” 


For trying to pick winners and losers in a volatile sector, for acting as if winning a Nobel Prize in physics also magically confers the title of venture capitalist, and for frittering away taxpayers’ hard-earned money, DOE Sec. Steven Chu is CAGW’s November 2011 Porker of the Month.


CAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.  Porker of the Month is a dubious honor given to lawmakers, government officials, and political candidates who have shown a blatant disregard for the interests of taxpayers. 


 

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